Additional Important Information. Contents

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1 Benefits Guide American Airlines provides you with a comprehensive benefits package designed to help you meet the health and insurance needs of you and your eligible family members. To help you make the most of those benefits, this Guide describes the major provisions of the plans and explains how you can use them effectively. The benefits described in this Guide include: Health Care Benefits Medical Options, specifically Standard Medical options Value Plus Option Value Option HMOs Supplemental Medical Plan (terminated coverage for active employees effective December 31, 2010) Dental Coverage Vision Coverage Employee Assistance Program Life Insurance & Accident Insurance; Disability Benefits; Flexible Spending Accounts The Health Care Flexible Spending Account The Dependent Day Care Flexible Spending Account Long Term Care Insurance and Retiree Benefits. 1

2 Benefits Guide Additional Important Information In addition to the descriptions of the benefits provided and how each plan works, this Summary Plan Description also provides general and plan specific information in the: About this Guide section General Eligibility section General Enrollment section Life Events section Additional Health Benefit Rules section Plan Administration section Reference Information section, including a Contacts list, the Glossary, and the Archives of older versions of the Guide. Contents Benefits Guide... 1 About This Guide... 5 General Eligibility... 7 Employee Eligibility... 8 Dependent Eligibility by Benefit Dependent Eligibility Requirements Employees Married to Other Employees Ineligibility General Enrollment Annual Enrollment How to Enroll Default Coverage HIPAA Special Enrollment Rights Medical Benefit Option When Coverage Ends Life Events: Making Changes During the Year Life Events If Your Dependent(s) Lose Eligibility Under the Plan Special Life Event Considerations HIPAA Special Enrollment Rights Medical Benefit Option Medical Benefit Options Overview Medical Benefit Options Medical Benefit Options Comparison Mental Health and Chemical Dependency Care Gender Reassignment Benefit (GRB) Wellness Resources Covered Expenses Excluded Expenses CheckFirst (Predetermination of Benefits) QuickReview (Pre-Authorization) Standard Medical Options How the Standard Medical Options Work Covered and Excluded Expenses Filing Claims Prescription Drug Benefits

3 Benefits Guide Value Plus Option How the Value Plus Option Works Covered and Excluded Expenses Filing Claims Prescription Drug Benefits Value Option How the Value Option Works Covered and Excluded Expenses Filing Claims Prescription Drug Benefits Health Maintenance Organizations (HMOs) Eligibility How HMOs Work HMO Contact Information Supplemental Medical Plan Dental Benefits How the Dental Benefit Works Covered Expenses Excluded Expenses Filing Claims Vision Insurance Benefit How the Vision Insurance Benefit Works Covered Expenses Filing Claims Employee Assistance Program (EAP) Life Insurance Benefits How the Life Insurance Benefit Works Designating Beneficiaries Coverage if You Become Disabled Special Provisions Filing Claims Accident Insurance Benefits Accidental Death & Dismemberment Insurance (AD&D) Other Accident Insurance: Special Risk Accident Insurance (SRAI) Benefit and Special Purpose Accident Insurance (SPAI) Benefit Disability Benefits Optional Short Term Disability (OSTD) Insurance Long Term Disability Health Care Flexible Spending Account How the Health Care Flexible Spending Account (HCFSA) Works Covered Expenses Excluded Expenses Filing Claims If You Elect Both a Health Care and a Dependent Day Care FSA Dependent Day Care Flexible Spending Account How the Dependent Day Care Flexible Spending Account Works Covered Expenses Filing Claims If You Elect Both a Health Care and a Dependent Day Care FSA Long-Term Care Insurance Plan Retiree Benefits Retiree Medical Benefits

4 Benefits Guide Retiree Life Insurance Benefit Right to Amend Additional Health Benefit Rules Qualified Medical Child Support Orders (QMSCO) Procedures Coordination of Benefits Coordination with Medicare When Coverage Ends Continuation of Coverage COBRA Continuation HIPAA Certificate of Creditable Coverage Plan Administration Plan Information Administrative Information Plan Amendments Plan Funding Collective Bargaining Agreement Assignment of Benefits Claims Standard Medical Options ONLY Claims For the Value Plus Option and Value Option ONLY Appealing a Denial Standard Medical Options ONLY Appealing a Denial For the Value Plus Option and Value Option ONLY Notice of Privacy Rights Health Care Records How AMR Corporation Subsidiaries May Use Your Health Information Separation of AMR Corporation Subsidiaries and the Group Health Plans Your Rights Under ERISA Reference Information Contact Information Glossary Archives

5 About This Guide This Employee Benefits Guide for Employees Represented by the Transport Workers Union of America, AFL-CIO ( TWU employees );( Guide ) contains the legal plan documents and the summary plan descriptions (SPDs) for the following plans of the Flexible Benefits Program: the Group Life and Health Benefits Plan for Employees of Participating AMR Corporation Subsidiaries (the Group Life and Health Plan ), and the Long Term Care Insurance Plan for Employees of Participating AMR Corporation Subsidiaries (collectively the Plans ). The provisions of this Guide apply to eligible employees of the participating subsidiaries of AMR Corporation, including employees on the United States payroll, spouses, dependents and surviving spouses who elect coverage under the benefits program. The Company reserves the right to modify, amend or terminate any of the Plans, any program described in this Guide, or any part thereof, at its sole discretion. Changes to the Plans generally will not affect claims for services or supplies received before the change. Only the Pension Benefits Administration Committee (PBAC) is authorized to change the Plans. From time to time, you may receive updated information concerning changes to the Plans. Neither this Guide nor updated materials are contracts or assurances of compensation, continued employment or benefits of any kind. In the event of a conflict between the Plans provisions contained in this Guide and the provisions contained in any applicable collective bargaining agreement (and/or insurance policies for fully-insured programs), the collective bargaining agreement (and/or insurance policy for fully-insured programs) shall govern in all cases with respect to employees covered by such agreement. American Airlines, Inc., sponsor and administrator of the Group Life and Health Benefits Plan for Employees of Participating AMR Corporation Subsidiaries, believes that the some of the medical coverages in this plan meet the requirements to be deemed grandfathered health plan(s), while others do not under the Patient Protection and Affordable Care Act (PPACA). As permitted by PPACA, a grandfathered health plan can preserve certain basic health coverage that was already in effect when that law was enacted. Being a grandfathered health plan means that your medical coverage may not include certain consumer protections of PPACA that apply to other plans for example, the requirement for the provision of preventive health services without any cost sharing. However, grandfathered health plans must comply with certain other consumer protections in PPACA for example, the elimination of lifetime limits on benefits. The following chart specifies which medical benefit options in this plan are grandfathered, and which are not: Medical Option Standard Medical Option 1 Standard Medical Option 3 Value Medical Option Value Plus Medical Option HMO Medical Options Grandfathered or Non-Grandfathered Grandfathered Grandfathered Non-Grandfathered Non-Grandfathered May be either, depending upon the HMO; contact your specific HMO for this information 5

6 About This Guide Questions regarding which protections apply and which protections do not apply to a grandfathered health plan, and what might cause a plan to change from grandfathered health plan status can be directed to the plan administrator at American Airlines, Inc. PO Box Mail Drop 5141, HDQ1 Dallas-Fort Worth Airport, TX You may also contact the Employee Benefits Security Administration, US Department of Labor, at This Employee Benefits Security Administration, US Department of Labor website has a table summarizing which protections do and do not apply to grandfathered health plans. 6

7 General Eligibility You are eligible for coverage for yourself and your eligible dependents after you fulfill a one-month waiting period of active employment. You must provide proof of eligibility for dependent coverages. Spouses, common law spouses, Domestic Partners and dependent children are eligible for coverage under certain benefits. Some employees may be ineligible for coverage under the benefit program for TWU-represented employees. Determination of Eligibility You are eligible for the Value Plus Option, Value Option or an HMO only if you reside where your network and/or claims administrator or HMO offers a network. Your eligibility is determined by the ZIP code of your Jetnet alternate address on record. Jetnet allows you to list two addresses a permanent address (for tax purposes or for your permanent residence) and an alternate address (for a P.O. Box or street address other than your permanent residence). Since many employees maintain more than one residence, you may list both addresses in Jetnet; however, your alternate address determines your eligibility. If you do not have an alternate address listed in Jetnet, your eligibility is based on your permanent address. This does not apply to the Standard Options. In This Section See Page Employee Eligibility... 8 Proof of Eligibility... 8 Coverage Requiring Proof of Good Health... 8 Eligibility During Leaves of Absence and Disability... 9 Eligibility After Age Dependent Eligibility by Benefit Medical Coverage Dental and Vision Coverage Child Life Insurance and Child Accidental Death and Dismemberment (AD&D) Insurance Spouse Life Insurance and Spouse Accidental Death and Dismemberment (AD&D) Insurance Dependent Eligibility Requirements Determining a Child s Eligibility Dependents of Deceased Employees Common Law Spouses and Domestic Partners Employees Married to Other Employees Other Information Ineligibility

8 General Eligibility Employee Eligibility You are eligible for coverage for yourself and your eligible dependents after you fulfill a onemonth waiting period. If you are not at work on the date coverage would otherwise begin, coverage is effective on the date you are actively at work, unless you are not actively at work due to a health condition; then coverage is effective on the date coverage would otherwise begin. If you do not enroll for coverage when you are first solicited for benefits, you will receive default coverage. After you receive your enrollment information, you may enroll on the Benefits Service Center. You are ineligible to participate in the Flexible Benefits Program if your employment relationship with the Company is defined under Ineligibility. Proof of Eligibility AMR Corporation and its subsidiaries reserve the right to request documented proof of dependent eligibility for benefits at any time. If you do not provide documented proof when requested, or if any of the information you provide is not true and correct, your actions will be considered a violation of the Rules of Conduct and may result in termination of employment, benefit or plan coverage termination, and efforts to recover any overpaid benefits. Whether you: Request to enroll dependents when you are first eligible to enroll in benefits, or Request to enroll new dependents at annual enrollments, or Request to enroll new dependents as the result of a Life Event, you must submit proof of the dependents eligibility to HR Services within 60 days of the date you request their enrollment. Examples of proof that dependents you want to enroll qualify include: official government-issued birth certificates, adoption papers, marriage licenses, etc., as detailed in the Proof of Eligibility Requirements. Important: Your dependents coverage and enrollment will be effective only after you have timely requested their enrollment and timely provided satisfactory proof of eligibility. Coverage Requiring Proof of Good Health The following coverage requires proof of good health: As a new employee: Employee Voluntary Term Life Insurance (in amounts greater than the 1 basic coverage) As an existing employee: Employee Voluntary Term Life Insurance (if you waived coverage when first eligible or wish to increase coverage) As a new or existing employee: Spouse Term Life Insurance (all levels of coverage) Proof of good health is determined based on the information you supply in the Statement of Health. For coverage requiring proof of good health, coverage becomes effective only after MetLife approves your Statement of Health and your first contribution is paid, either by you or through payroll deductions. 8

9 General Eligibility Eligibility During Leaves of Absence and Disability You may be eligible to continue benefits for yourself and your eligible dependents for a period of time during a leave, subject to the specific rules governing leaves of absence. The type of leave you take determines the cost of your benefits (i.e., whether you and the Company share the cost of the benefits, or you pay the full cost of benefits). In order to continue your benefits during a leave of absence, you must timely pay the required contributions for your benefits during your leave. Your leave of absence begins when your payroll transaction record is changed to reflect that you are on a leave of absence. HR Services will send you a letter acknowledging your leave, instructing you to access Jetnet to register your leave of absence Life Event, and asking you to decide if you will or will not continue your benefits while on leave. Once you record your Life Event and benefit elections on the Benefits Service Center, it will display a confirmation statement showing your choices, the monthly cost of benefits, covered dependents, etc. If you have not received the HR Services letter within 10 days of being placed on a leave, immediately contact HR Services by clicking on the Start a Chat button at the top of this page to be sure you can continue coverage during the leave. If you elect not to continue your benefits during your leave of absence or if you fail to timely pay the required monthly contributions for coverage, your benefits will terminate for the duration of your leave of absence. When you return to active employee status, you may reactivate most of your benefits. However, some benefits will require you to supply proof of good health in order to reactivate (i.e., Voluntary Term Life Insurance Benefit). Family Medical Leave of Absence (FMLA) or Military Leave If your leave is an FMLA or military leave, special rules govern your rights to continue or resume your benefits, which are based on federal law. While you are: Receiving accrued sick pay During the first year of an unpaid sick or injury-on-duty leave of absence you may keep the same health and welfare benefits you had while actively working by continuing to pay your share of the cost. If your disability continues beyond 12 months, you must pay 100% of contributions. Should your disability continue until your retirement at age 65, your active health and welfare benefits terminate at age 65, and you are then eligible for Retiree Medical and Life Benefits. (See the Retiree Benefit Guide for more information about Retiree Medical and Life Benefits.) When you are on a military leave of 30 days or more, you may continue health coverage for your eligible dependents (and resume your coverage upon ending your military leave) under the Uniformed Services Employment and Reemployment Rights Act (USERRA). For more information see Continuation of Coverage for Employees in the Uniformed Services under Continuation of Coverage COBRA Continuation in the Additional Health Benefit Rules section. You may review a detailed description of each leave of absence or consult with your supervisor/manager. 9

10 General Eligibility Eligibility After Age 65 As an active employee, your medical coverage continues for you and your covered dependents as long as you remain an active employee. When you reach age 65 (or your spouse reaches age 65), you (or your spouse) must notify the Company in writing that you want Medicare to be your only coverage. If you elect Medicare as your only coverage, your Company-sponsored active medical coverage will terminate, including coverage for your dependents. If your spouse elects Medicare as his or her only coverage, only your spouse s Company-sponsored active coverage will terminate. Dependent Eligibility by Benefit Dependent eligibility requirements are different depending on the benefit coverage you elect. Medical Coverage An eligible dependent is an individual (other than the employee covered by the Flexible Benefits Program) who lives in the United States, Puerto Rico or the U.S. Virgin Islands, or who accompanies an employee on a Company assignment outside the U.S. and is related to the employee in one of the following ways: Spouse, Domestic Partner or common law spouse. Domestic Partners and their children may be eligible for coverage under your HMO. Contact your HMO directly for eligibility criteria. Domestic Partners and their children are not eligible to participate in Flexible Spending Accounts. Child under age 26 who is not eligible for his or her own medical coverage through his or her employer. Incapacitated child age 26 or over who maintains legal residence with you and is wholly dependent upon you for maintenance and support. Child for whom you are required to provide coverage under a Qualified Medical Child Support Order (QMCSO) that is issued by the court or a state agency. Dental and Vision Coverage An eligible dependent is an individual (other than the employee covered by the Flexible Benefits Program) who lives in the United States, Puerto Rico or the U.S. Virgin Islands, or who accompanies an employee on a Company assignment outside the U.S. and is related to the employee in one of the following ways: Spouse, Domestic Partner or common law spouse. Unmarried child under age 23 who maintains legal residence with you. Child for whom you are required to provide coverage under a Qualified Medical Child Support Order (QMCSO) that is issued by the court or a state agency. 10

11 General Eligibility Child Life Insurance and Child Accidental Death and Dismemberment (AD&D) Insurance An eligible dependent is an individual (other than the employee covered by the Flexible Benefits Program) who lives in the United States, Puerto Rico or the U.S. Virgin Islands, or who accompanies an employee on a Company assignment outside the U.S. Child means the following: Incapacitated child age 19 or over who maintains legal residence with you and is wholly dependent upon you for maintenance and support. Your natural child, adopted child (including a child from the date of placement with the adopting parents until the legal adoption) or stepchild (including the child of a Domestic Partner) who is: under age 19 unmarried and supported by you; or under age 23 and who is: a full-time student at an accredited school, college or university that is licensed in the jurisdiction where it is located; unmarried; supported by you; and not employed on a full-time basis. The term does not include any person who: Is in the military of any country or subdivision of any country; or Is insured under the Group Policy as an employee. For Texas residents child means the following for Life Insurance: Your natural child, adopted child or stepchild (including the child of a Domestic Partner) who is under age 25 and unmarried. The term also includes your grandchild who is under age 25, unmarried and who was able to be claimed by you as a dependent for Federal Income Tax purposes at the time you applied for Life Insurance. A child will be considered your adopted child during the period you are party to a suit in which you are seeking the adoption of the child. The term does not include any person who: Is in the military of any country or subdivision of any country; or Is insured under the Group Policy as an employee. 11

12 General Eligibility Spouse Life Insurance and Spouse Accidental Death and Dismemberment (AD&D) Insurance An eligible dependent is an individual (other than the employee covered by the Flexible Benefits Program) who lives in the United States, Puerto Rico or the U.S. Virgin Islands, or who accompanies an employee on a Company assignment outside the U.S. and is related to the employee in one of the following ways: spouse, Domestic Partner or common law spouse, not employed by the Company. Dependent Eligibility Requirements Determining a Child s Eligibility For the purpose of determining eligibility, child includes your: Natural child Legally adopted child Natural or legally adopted child of a covered Domestic Partner as defined by the Plan For Medical coverage: Stepchild For Medical and Dental coverage: Stepchild, if the child lives with you, and you (the employee) either jointly or individually claim the stepchild as a dependent on your federal income tax return Special Dependent, if you meet all of the following requirements: You must have legal custody and legal guardianship of the child. The child must maintain legal residence with you and be wholly dependent on you for maintenance and support. You must submit a Statement of Dependent Eligibility for Special Dependent Form to HR Services and HR Services must approve the form. (Complete and return the form to HR Services, along with copies of the official court documents awarding you custodianship or guardianship of the child.)you must receive confirmation from HR Services notifying you of its determination. HR Services will send you a letter notifying you of its findings. If your request is approved, the notification letter will include an approval date. If you submit your request within 60 days of the date that legal guardianship or legal custodianship is awarded by the court, coverage for the child is effective as of that date, pending approval by HR Services. If you submit the request after the 60-day time frame, the child will not be added to your coverage. You are required to provide coverage under a Qualified Medical Child Support Order (QMCSO) that is issued by the court or a National Medical Support Notice issued by a state agency (see Procedures upon Receipt of Qualified Medical Child Support Order (QMCSO) or State Agency Notice under Qualified Medical Child Support Orders (QMCSO) Procedures in the Additional Health Benefit Rules section. 12

13 General Eligibility Coverage for an Incapacitated Child Medical Coverage Only An incapacitated child age 26 or older is eligible for continuation of coverage if all of the following criteria are met: The child was already continuously covered as your dependent under this Plan before reaching age 26 The child is mentally or physically incapable of self-support. You file a Statement of Dependent Eligibility for Incapacitated Child within: For UnitedHealthcare: Within 60 days of the date coverage would otherwise end For Blue Cross and Blue Shield of Texas: Within 45 days of the date coverage would otherwise end For Aetna: Within 90 days of the date coverage would otherwise end For HMOs: Contact your HMO for the time limit and your network and/or claim administrator then approves the application. The child continues to meet the criteria for dependent coverage under this Plan. You provide additional medical proof of incapacity as may be required by your network and/or claim administrator from time-to-time. Coverage will be terminated and cannot be reinstated if you cannot provide proof or if your network and/or claim administrator determines the child is no longer incapacitated. If you elect to drop coverage for your child, you may not later reinstate it. Either the child maintains legal residence with you and is wholly dependent on you for maintenance and support, or you are required to provide coverage under a Qualified Medical Child Support Order (QMCSO) that is issued by the court or a state agency. Dependents of Deceased Employees If you have elected medical coverage for your spouse and children and you die as an active employee, your dependents medical coverage will continue for 90 days at no contribution cost. Your covered dependents are also eligible to continue medical coverage and certain other benefit options for up to 36 months under COBRA Continuation Coverage at the full COBRA rate (see Continuation of Coverage COBRA Continuation in the Additional Health Benefit Rules section. The 90 days of coverage are part of the 36 months of COBRA coverage. If you are over age 55 but not yet 65 and working as an active employee, your surviving spouse is eligible for Retiree Medical Benefits if you die and were otherwise eligible for this coverage. This applies regardless of your spouse s age at the time of your death. Your covered dependents can elect to continue dental and vision insurance benefits under COBRA at the full COBRA rate, if they had dental and/or vision benefits at the time of your death. To continue dental and/or vision coverage, your dependents must pay contributions effective from the day of your death. 13

14 General Eligibility Common Law Spouses and Domestic Partners Common Law Spouses Quick Tip Common law spouse criteria varies by state, so check with your state s requirements for common law marriage. Common law spouses are eligible for enrollment in Plan benefits only if your common law marriage is recognized and deemed (certified) legal by the individual state where the employee resides, and only if the employee and spouse have fulfilled the state s requirements for common law marriage. To enroll your common law spouse for benefits, you must complete and return a Common Law Marriage Recognition Request Form. Along with the form, you must provide proof of common law marriage, as specified on the form. Applicants for common law recognition may not be married to other persons; additionally, applicants may not be of the same gender. Although criteria vary by state, the following guidelines usually apply: The couple cohabitates for a specified period of time established by the state. The persons recognize each other as husband and wife. The persons hold each other out publicly as husband and wife. Domestic Partners Domestic Partners are defined by AMR as two people in a spouse-like relationship who meet all of the following criteria: Are the same gender Reside together in the same permanent residence and have lived in a spouse-like relationship for at least six consecutive months Are both at least 18 years of age and are not related by blood in a degree that would bar marriage Are not legally married or the common law spouse or Domestic Partner of any other person and cannot enter into a marriage recognized as legal in all 50 states and under the laws of the United States Submit a complete and valid Declaration of Domestic Partnership from the Domestic Partner Enrollment Kit After reviewing the Domestic Partner Kit, if you need additional information regarding benefits and privileges available to Domestic Partners, please contact HR Services (see Contact Information in the Reference Information section). Domestic Partners and their eligible dependent children are eligible to be covered under the following benefits or Plans: Standard, Value and Value Plus Medical Options Dental Benefit (for active employees, their spouse or Domestic Partner, and eligible dependents) Vision Insurance Benefits Spouse and Child Life Insurance Benefits Retiree Medical Benefits Accident Insurance Benefits 14

15 General Eligibility Under current laws, a Domestic Partner and his or her dependent children are not eligible for certain health and welfare benefits under an ERISA-governed plan. Domestic Partners are not eligible to participate in: Flexible Spending Accounts (your Domestic Partner s health care expenses may not be reimbursed from your Health Care FSA) Domestic Partners may be eligible to participate in: Health Maintenance Organizations (HMOs). Contact your HMO directly for eligibility criteria. If your Domestic Partner is covered under the Retiree Medical Benefits at the time of your death, coverage will continue for the 90 days immediately following your death. At the end of the 90-day period, your Domestic Partner may elect COBRA Continuation Coverage under COBRA for up to 36 months. Employees Married to Other Employees Married employees have the option of being covered under one employee s medical, dental and/or vision benefits, if they choose. Married employees may elect to be covered under one employee during annual enrollment or at the time of a Life Event. During annual enrollment, the employee who is electing to cover both employees for medical, dental and/or vision benefits must indicate that he or she is covering the spouse (and any other eligible dependents) in the Dependents area of the online Benefits Service Center. The employee who will be covered as the spouse must choose AA-Married on the Benefits Service Center. The following benefits, plans and voluntary benefits must still be maintained independently: Accident Insurance Benefits Employee Term Life Insurance Benefit Retiree Medical Benefits (when available) Employees married to other employees in other workgroups or other subsidiaries should carefully consider available options and costs before making any decisions. If you have any questions regarding your benefits under this situation, please contact HR Services (see Contact Information in the Reference Information section). Change in spouse s employment: If employees choose to maintain separate benefits and one spouse ends his or her employment with the Company or moves to a subsidiary that does not offer the: Flexible Benefit Program, benefit program for Pilots, or benefit program for Flight Attendants, the spouse who changes his or her employment is eligible for coverage as a dependent (if he or she waives coverage under the subsidiary s health plan). However, if an employee is discharged for gross misconduct not related to any existing health condition for which treatment was provided for under the Plans, benefits or options, he or she cannot be covered as a dependent of the active employee. 15

16 General Eligibility Spouse not eligible for full benefits: During the one-month waiting period required for some workgroups to be eligible for benefits, the new employee may be covered as the spouse of the active employee who already has benefits. If your spouse or Domestic Partner is working as a Part-Time Extendable, Part-Time Non-Extendable, Job Share, Reduced Work Schedule, Home Based Reservations Rep or Reduced Work Week Reservations Rep employee, he or she may waive medical, dental and/or vision coverage and be covered as a dependent under your coverage. Retirees married to active employees: Retirees married to active employees are eligible for coverage as dependents of active employees. The benefits available and benefit limits, if any, are defined by the active employee s coverage unless the retiree has opted for a lesser medical maximum plan (such as Article 30 for Flight Attendants). When the actively working spouse retires, each retiree is covered under his or her own retiree health benefit, if applicable. Please refer to the Retiree Benefit Guide for information specific to each workgroup. Spouse on leave of absence: For leaves of absence, when Company-provided benefits terminate, a spouse on a leave of absence may continue to purchase coverage as an employee on leave or elect to be covered as the dependent of the actively working spouse, but not both. The actively working spouse s health coverage determines the health benefit coverage for all dependents. Because a leave of absence is a Life Event (see the Life Events section), the actively working spouse may make changes to his or her other coverages. The actively working spouse may elect to: Add the spouse on leave as a dependent Cover only eligible dependent children Cover both the spouse and children Enroll himself or herself, and the spouse and children as dependents If an employee elects to be covered as a dependent during a leave of absence, the following conditions apply: Optional coverages the person elected as an active employee end, unless payment for these coverages is continued while on leave. Proof of good health may be required to re-enroll or increase optional coverages upon the employee s return to work. Provided the employee on leave makes timely payments for benefits, Company-provided coverage (where the Company pays its share of the cost and the employee on leave pays his/her share) will continue for a period of time for employees on family, sick, injury-on-duty or maternity leaves. These employees cannot be covered as dependents. For other types of leaves, the employee must timely pay the full cost of his/her coverage while on leave. Other Information Eligible dependent children: If both spouses are covered under the Flexible Benefits Program, eligible dependent children are covered as dependents of the parent whose birthday occurs first in the calendar year, unless the parents elect otherwise. Contact HR Services (see Contact Information in the Reference Information section) to change this requirement. If one spouse is covered under the Flexible Benefits, the children are covered under the parent with Flexible Benefits, unless the parents elect otherwise through HR Services. Children cannot be covered under both parents health benefits. See Dependent Eligibility Requirements on page 12 for additional information. 16

17 General Eligibility Contributions: Both you and your spouse may elect to be covered independently under the benefits plans or options for which you are each eligible. If married employees choose to be covered under one employee, the contributions for the employee covering both would reflect either Employee plus One or Employee plus Two or more, whichever is applicable. This applies to contributions for the Medical, Dental and Vision Benefits. Contributions for benefits that still must be maintained independently, such as Life Insurance (see the Life Insurance section), will be applied appropriately and payroll-deducted from each employee s paycheck. Family deductibles: If the parents choose different options, the family deductible applies to the employee covering the children and the individual deductible applies separately to the other parent. HMO participation: Domestic Partners may be eligible for coverage under your HMO, subject to the HMO s eligibility rules. If your Domestic Partner can be covered under your HMO, you will be able to choose coverage for him or her when you enroll. The decision to offer coverage to Domestic Partners is made by individual HMO plan provisions, not by American Airlines. Accident coverage: Both you and your spouse or Domestic Partner must enroll for yourselves (for married employees without children) you cannot be covered both as an employee and as a dependent. For married employees with dependents, you cannot be covered as an employee and as a dependent; therefore, only the parent who elects medical coverage for the dependent children may elect family accident coverage, and the spouse or Domestic Partner must waive coverage. If your spouse or Domestic Partner works for an AMR subsidiary that does not offer accident coverage, you may elect Voluntary Personal Accident Insurance Benefit for him or her (see the Accident Insurance Benefits section). Flexible Spending Accounts: Contributions to the Health Care Flexible Spending Account (see the Health Care Flexible Spending Account section) and Dependent Day Care Flexible Spending Account (see the Dependent Day Care Flexible Spending Account section) may be made by one or both spouses. Either of you may submit claims to the account. However, if only one spouse is making contributions to the account, claims must be submitted under that person s Social Security number. If you both make contributions to the Dependent Day Care Flexible Spending Account, you may only contribute the maximum amount the law permits for a couple filing a joint tax return. For the Health Care Flexible Spending Account, you may both make contributions up the maximum allowed by American Airlines. You may not file claims for expenses incurred by a Domestic Partner who is an employee of AA (or his or her dependents) under your Flexible Spending Accounts according to federal law. Domestic Partners who are both AA employees may have his or her own Flexible Spending Account. Retiree Medical Benefits: If you are both eligible for benefits, you must each maintain (or prefund, if your workgroup requires that you prefund for Retiree Medical Benefits) your Retiree Medical Benefits as individuals. By maintaining (or prefunding, if applicable) your Retiree Medical Benefits separately, the death of your spouse or a divorce would not jeopardize your eligibility for Retiree Medical Benefits. 17

18 General Eligibility Ineligibility The following individuals are not eligible to participate in this benefits program: A leased employee, as defined in section 414(n) of the Internal Revenue Code. This includes any person (regardless of how such person is characterized, for wage withholding purposes or any other purpose, by the Internal Revenue Service, or any other agency, court, authority, individual or entity) who is classified, in the sole and absolute discretion of the Company as a temporary worker; this term includes any of the following former classifications: Temporary employee If a temporary worker becomes a regular employee, and meets all of the other requirements to participate in the Flexible Benefits Program without a break in service, the time worked as a full-time temporary worker will be credited solely toward the eligibility requirement for life and health coverage. Under no circumstances will time worked as a temporary worker entitle the individual to retroactive group health and welfare benefits. Provisional employee Associate employee An independent contractor Any person: Who is not on the Company s salaried or hourly employee payroll (the determination of which shall be made by the Company in its sole and absolute discretion) Who has agreed in writing that he or she is not an employee or is not otherwise eligible to participate Whose compensation is reported to the Internal Revenue Service on a form other than a Form W-2, regardless of whether such person was treated as an employee for federal income tax purposes Parents or grandchildren. Neither your parents nor grandchildren are eligible as dependents, regardless of whether they live with you or receive maintenance or support from you (unless you are the grandchild s legal guardian). You may be eligible for reimbursement of their eligible expenses under the Health Care Flexible Spending Account (see the Health Care Flexible Spending Account section) and Dependent Day Care Flexible Spending Account (see the Dependent Day Care Flexible Spending Account section) if you claim your parent or grandchild as a dependent on your federal income tax return. 18

19 General Enrollment You have the opportunity to select benefits tailored to your individual needs and preferences each year during annual enrollment. The annual enrollment period is October 1 through October 31. Employees enroll online using the Benefits Service Center. The Plan year is January 1 through December 31. If you do not enroll for benefits during the annual enrollment period, you will automatically default to your current selections (if available) for the following year, at the applicable rates for the following year (Note: this does not apply to Flexible Spending Accounts). If one or more of your current selections are no longer available and you do not make another selection, you will be enrolled in the applicable benefit or plan designated as the default coverage for your workgroup. After annual enrollment is completed and the new benefit year has begun, you will only be able to make changes to your elections if you experience a Life Event. If you are adding new dependents to your benefits, you must submit to HR Services proof that these dependents qualify as your eligible dependents within 60 days of the date you request enrollment. Life Event changes must be made within 60 days of the Life Event. The Benefits Service Center The Benefits Service Center (the online enrollment tool) on Jetnet reflects the current benefits coverages available to you and the rates for those coverages. The Benefits Service Center is updated by October 1 with your benefits options and the new rates for the upcoming Plan year January 1 through December 31. In This Section See Page Annual Enrollment How to Enroll New Employee Enrollment When Coverage Begins as a Newly Hired Employee When Coverage Begins as a Current Employee Waiving Coverage Default Coverage HIPAA Special Enrollment Rights Medical Benefit Option When Coverage Ends

20 General Enrollment Annual Enrollment Each year eligible employees have the opportunity to select benefits for the upcoming Plan year January 1 through December 31. During annual enrollment you can: Enroll for coverage, Add or remove a dependent to coverage, Make changes to your prior elections, or Continue your previous elections at the applicable new rates. New rates are shown on the Benefits Service Center when you enroll. With the exception of Life Events, annual enrollment is the only time you can change your coverage elections. Any elections you make during annual enrollment are generally effective the following January 1. If proof of good health is required, the effective date for coverage, if approved, may be delayed to allow for review of your proof of good health, (e.g., to add or increase life insurance coverage). Once Annual Enrollment ends on October 31, your benefit elections for the upcoming plan year are recorded and locked in, and you are not allowed to make changes to these elections unless you experience a Life Event that would enable you to make such changes. However, between the close of Annual Enrollment (beginning November 1) and the start of the new plan year (January 1 following Annual Enrollment), you may be permitted to CORRECT any erroneous elections you made during Annual Enrollment, as long as you make those corrections before the start of the new plan year. For example, during Annual Enrollment for the upcoming plan year, you elected to establish a Dependent Day Care Flexible Spending Account (DDFSA), even though you do not have any dependents. When you are reviewing your benefit elections a month later (end-november), you discover your mistake. If you request correction of your mistake before the beginning of the upcoming plan year, your election correction is permitted. However, if you fail to discover your mistake and fail to request correction until after the new plan year begins (such as on January 12), you will not be permitted to make any correction of your enrollment mistake unless you experience a Life Event. This rule is set down by the federal government, and American Airlines cannot override this rule; to do so would jeopardize the tax-exempt status of the benefit plan for all employees. Remember, these post-annual Enrollment changes to your benefit elections are permitted to allow you to correct elections errors ONLY. Any other changes (such as: you have changed your mind about enrolling in a particular benefit, you want to change the network and/or claim administrator you elected, etc.) are not permitted. 20